Running a business is already hard work – particularly when it comes to assessing how much money you’re actually making.
With so much going on, it can be tricky to keep track of your incomings and outgoings, but that detail is vital in helping you understand your profit and loss.
Thankfully, the process is really simple.
How does it work?
Tracking your business in Xero means you can compare your company’s profit and loss on a monthly basis and compare the differences to see if anything has changed.
You can even compare data over the last six to 11 months to see how your business has developed over longer periods and use that information to adapt your business model, if required.
If you own several branches or departments, you can even separate the profit and loss of each branch individually by using a tool in Xero to track specific categories of sales across the various departments. It’s such a great feature!
Coding, categories, and bespoke reports
Need personalised reports? No problem!
There’s flexibility in Xero to create reports to suit your needs. For example, if you want to look at the percentage turnover of your business, you can run a custom report to give you all the information you need.
It’s great for giving managers the insight needed to conduct performance reviews on their sales staff, but ideal for analysing profits in a way that makes sense to your business, too.
Why track your profits?
By analysing all of this useful data you can determine which of your business endeavours and investments are the most profitable.
It gives you the knowledge you need to make better, more informed decisions about your company growth and business needs.
But, perhaps most importantly, tracking your profits will enable your business to adapt to an ever-changing market.
You just need the right tool to make it as easy as it should be! That’s where Xero comes in.
Why should I use tracking in Xero?
There are many benefits to tracking your accounts. In fact, you’ll wish you had done it sooner!
- Stopping overspending as soon as possible: identify problems early so that you can work out the root cause, before it’s too late
- Tracking monthly overheads and goal setting: work out how much you need to make each month to break even on your costs
- Working smart: Quality control your invoices and rectify any mistakes before you send them out to your clients or before you accidentally overpay
- Make better, more informed decisions: Having up to date and accurate information will make making future investment decisions much easier
If you’re already using Xero, the tracking tool can easily be integrated to help you more accurately track your profits.
So, if you want more transparency over your cash flow and how you’re spending it, make sure you start tracking the profits and losses of your business – today.
If you’re stuck, or if this blog post has raised additional questions, good news. Trinity Accountants can help and ensure you’re on top of the numbers that matter the most in your business. Give our friendly team a call today.